Established Covered Calls Position in Charles Schwab Corporation

Early in this morning's trading session, a Covered Calls position was established in Charles Schwab Corporation (ticker SCHW) when my buy/write limit order was executed -- 200 shares were purchased at $93.79 and 2 November 21st, 2025 Call options were sold at $4.59 at the $90.00 strike price.  The corresponding extrinsic value (i.e. time value) was $.80 per share [$4.59 Call options premium - ($93.79 stock purchase price - $90.00 strike price)], all of which will be profit if the stock is assigned (either by early assignment on the day prior to the November 14th ex-dividend date or at the November 21st options expiration date). The Implied Volatility of the Call options was 26.6 which, as desired by the Covered Calls Advisor, is above the current 17.9 of the S&P 500 Volatility Index (i.e. VIX).  Also as preferred, the next earnings report on January 21st, 2025 is well after the options expiration date.

At today's purchase price, the upcoming ex-dividend of $.27 has a 1.2% annualized dividend yield.  So, this short-term (only 16 days until options expiration) position is established to take advantage of the potential to achieve a satisfactory annualized return-on-investment in a position that meets all nine criteria of the Covered Calls Advisor's Dividend Capture Strategy (see table at end of this post).  This $.27 dividend is a 8.0% increase from the $.25 dividend rate during the same quarter last year.    

Two potential return-on-investment results for this position are highlighted below (including the possibility of early assignment since the ex-dividend is prior to the November 14th options expiration date).  Given the Covered Calls Advisor's current Neutral overall market sentiment, an in-the-money Covered Calls position was established with a probability of 76.2% that the stock will be in-the-money, and therefore assigned (i.e. sold), on the November 21st, 2025 options expiration date.  

As detailed below, two potential return-on-investment results are: 

•  +0.9% absolute return (equivalent to +36.1% annualized return-on-investment for the next 9 days) in the event that the stock is assigned early (business day prior to its 11/14/2025 ex-dividend date); OR 

• +1.2% absolute return (equivalent to +27.2% annualized return-on-investment over the next 16 days) if the stock is assigned on the November 21st options expiration date.

Charles Schwab Corporation (SCHW) -- New Covered Calls Position

The buy/write transaction was:
11/5/2025 Bought 200 Schwab shares @ $93.79
11/5/2025 Sold 2 Schwab 11/21/2025 $90.00 Call options @ $4.59
11/14/2025 Upcoming quarterly ex-dividend of $.27 per share

Two possible overall performance results (including commissions) for this Charles Schwab Corporation Covered Calls position are as follows:
Covered Calls Net Investment: $17,841.34
= ($93.79 - $4.59) * 200 shares + $1.34 commission

Net Profit Components:
(a) Options Income: +$916.66
= ($4.59 * 200 shares) - $1.34 commission
(b) Dividend Income (If option exercised early on November 13th, the day prior to the November 14th ex-div date): +$0.00; or
(b) Dividend Income (If Schwab stock assigned at the November 21st, 2025 options expiration; so the $.27 dividend is captured): +$54.00
= ($.27 dividend per share x 200 shares)

(c) Capital Appreciation (If Schwab Call options assigned early on Nov. 14th, 2025): -$758.00
+($90.00 strike price - $93.79 stock purchase price) * 200 shares; or
(c) Capital Appreciation (If shares assigned at $90.00 strike price at options expiration): -$758.00
+($90.00 - $93.79) * 200 shares

1. Total Net Profit [If option exercised on 11/13/2025 (business day prior to the 11/14/2025 ex-dividend date)]: +$158.66

= (+$916.66 options income + $0.00 dividend income - $758.00 capital appreciation); or

2. Total Net Profit (If Schwab shares assigned at $90.00 at the 11/21/2025 expiration): +$212.66

= (+$916.66 options income + $54.00 dividend income - $758.00 capital appreciation)

1. Absolute Return-on-Investment [If option exercised early on 11/14/2025]: +0.9%

= +$158.66/$17,841.34

Annualized Return-on-Investment (If option exercised early): +36.1%

= (+$158.66/$17,841.34) * (365/9 days); or

2. Absolute Return-on-Investment (If Schwab shares assigned at $90.00 at the 11/21/2025 options expiration): +1.2%

= +$212.66/$17,841.34

Annualized Return-on-Investment (If Schwab shares assigned at $90.00 at the 11/21/2025 options expiration date): +27.2%

= (+$212.66/$17,841.34) * (365/16 days)

Either outcome provides a good return-on-investment result for this Schwab investment.  These returns will be achieved as long as the stock is above the $90.00 strike price at assignment.  If the stock declines below the strike price, the breakeven price of $88.93 ($93.79 - $4.59 - $.27) provides a 5.2% downside protection below today's stock purchase price.

At least eight of the nine metrics used in the Covered Calls Advisor's Dividend Capture Strategy spreadsheet must be 'YES' prior to establishing a position.  As shown below with this Charles Schwab Corporation position, all nine criteria are met.